End unfair climate funding

For example, climate smart agriculture has been sought to be defined by them in ways that will push their interests, instead of helping small farmers of the Global South.

End unfair climate funding

representational image (iStock photo)

An issue of growing concern that is likely to be reflected prominently at the Convention on Climate Change – the 26th Conference of Parties (COP26) – which starts at Glasgow today – is the increasing resentment in the Global South that the disbursement of funds in terms of the agreement for climate funding has not been just, having fallen much short of expectations and commitments.

It was at COP15 held at Copenhagen in 2009 that a decision was taken about the creation of an annual fund of $100 billion dollars, to be set up by developed countries for facilitilitating climate change adaptation and mitigation in the Global South (or developing countries, as the agreement stated).

This was confirmed at the time of the Paris agreement in 2015, when it was added that attempts to increase this funding around 2025 would be made. Against this commitment, what has been the actual achievement so far? The general consensus is that ‘we are not there yet’. While not disputing this, the OECD stated on behalf of the rich countries that by 2018-19 the funding had come quite close to between 78 and 80 billion dollars (per year) in these two years.


However this has been contested by several independent sources. A report by Oxfam stated that the actual funding is likely to have been somewhere between $ 19 and 22.5 billion in 2017-18. Some other estimates have also mentioned lower levels of funding, some lower than even the Oxfam estimate. How can estimates differ so much? One main reason relates to how special climate funding is defined.

Since this is not a business investment but is meant to help activities related to better adaptation to climate change and to reduction of GHG emissions, countries of the Global South had initially taken it for granted that climate funding would be in the form of grants. But soon it was found that loans were also being counted.

The component of loans had an increasing trend, while that of grants had a decreasing trend. Analysis of data for 2018 revealed that only 20 per cent of the fund consisted of grants. In addition, multilateral funding by organisations like the World Bank was also being counted. Export credits were also being counted. It was not very clear in several cases how what was being included in this category was different from normal lending.

Even loans given for projects known to cause ecological ruin and displacement were counted in some cases. Secondly, some negotiators have been stating that given the needs of the Global South and accepting the historical responsibility of the richest countries, in fact the sum of $100 billion is inadequate and needs to be increased several times.

In fact, negotiators for several African countries who met in September to prepare for COP26 came up with an estimate for 1.3 trillion dollars a year by the year 2030 to meet the needs of their continent alone. Even at present the needs of the Global South for climate change adaptation and mitigation are estimated to be several hundred billion dollars, and not $100 billion.

These opinions have emerged once the implications of the changes required have been studied in detail. Now it is being asked how the muchpublicized figure of 100 billion dollars was arrived at in 2009 in the first place. It appears that this was a rounded off, convenient figure and not based on a detailed calculation of real needs as well as the reduced value of this sum by the time the target was to be met by 2020.

Now two weaknesses are becoming increasingly clear. Firstly, detailed estimates of real needs were not prepared in a credible way in consultation with the Global South. Secondly, a specific commitment that this would be in the form of grants and not loans was not made, even though this was taken as granted by many. Hence an increasing need is now felt to make corrections.

Thirdly, it was important that the share of individual countries should have been spelt out, and penalties determined for delayed payments. The USA, which is supposed to be a very resourceful country, has been the worst offender, having paid only a fraction of what it was supposed to.

Unless there is a mechanism for ensuring that laggards are made to fulfil their commitment, there will be serious shortfalls and the preparations for mitigation and adaptation made by countries of the Global South may be seriously jeopardized when the expected funds do not materialize. The last problem is of unfair conditions getting attached to assistance. One of the critical components of foreign aid has been that it comes attached with narrow and self-serving conditions.

There are concerns that such conditions should not reduce the value of special funds. One reason for such a possibility is that several multinational corporations and big business interests have also been able to position themselves in the climate change negotiations. They not only seek to protect their narrow interests but also advance them in the name of climate change action.

For example, climate smart agriculture has been sought to be defined by them in ways that will push their interests, instead of helping small farmers of the Global South. There is now less of a tendency to speak of the special responsibility of the richest countries to contribute more to checking climate change and to help developing countries in their adaptation efforts. Even in terms of allocation of the limited funds that have become available, there is lesser allocation for adaptation aspects.

Clearly a much more sincere, just and transparent approach is needed in terms of increasing and strengthening climate funds and ensuring their fair utilisation in the interests of the Global South.

(The writer is Honorary Convener, Campaign to Save Earth Now. His recent books include Planet in Peril and Protecting Earth for Children)